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Builders' merchants enjoy third-quarter growth

25 Nov 16 Sales of building materials through UK builders’ merchants rose by 3.8% in the three months after the EU referendum, compared with the same period of 2015.

A hardware store
A hardware store

The third quarter of 2016 suggests that builders’ merchants bucked the downward construction trend reported by the Office for National Statistics (ONS) earlier this month.

Latest figures from the Builders Merchants Building Index (BMBI) show that total merchant sales in Q3 2016 were up by 3.8% on the same period last year with total ex-VAT sales reaching £1.43bn compared to £1.39bn in 2015.

Total sales for the first nine months of the year were up 5.1% year on year.

Year-on-year sales growth in Q3 was particularly strong in the landscaping sector (+9.6%), helped by good weather throughout the period. Ironmongery (up 5.9%) also performed well, as did the market’s largest product category, heavy building materials (+4.4%).

However, total merchant sales in Q3 were down by 0.6% on the second quarter, and down by 3.7% less when adjusted for two fewer trading days.  This is a turnaround from last year.  In 2015, Q3 sales were 1.7% higher than Q2. It remains to be seen if this is an early warning sign that the market may be slowing, the survey authors said.

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John Newcomb, managing director of the Builders Merchant Federation, which sponsors the survey, said: “Positive trading results in first three months following Brexit are an important indicator of the industry’s health. Year-on-year sales have continued to grow throughout 2016, bucking the construction trends identified by the ONS.”

Revised ONS figures for July and August showed construction down by -0.8% and +0.8% respectively on the previous year, with a provisional September figure of +0.2%.

Mr Newcomb added: “We are not overly concerned about the slight drop in sales from Q2 as annual sales can peak in either quarter, but we will be monitoring this going forward.”

The survey is compiled by GfK tracking point of sale data from builders’ merchants representing more than 80% of the market by value. 

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MPU
MPU

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